Started at the 100 day MA
The AUDUSD is trading to new session lows. Adam spoke to some reasons for the declines and expectations given the US/China truce, Fed policy and the RBA decision tonight as well. The central bank is expected to cut rates by 25 basis points. The Fed may not cut (or cut as much).
Technically, the price action has followed a somewhat predictablle path lower.
- The pair stalled just ahead of it's 100 day MA in the first minutes of trading today. The 100 day MA comes in at 0.7033. The high for the day reached 0l.7032. Traders could not ignore that high. Buyers tilted to selllers
- The price fell below a trend line at 0.7009. That gave sellers more courage that a high was in
- The price stalled at the 100 hour but eventually gave way in the NY session as traders focused more on the Fed and the possibility they might hold off on easing. The break gave sellers more confidence and the price has now moved to new session lows.
What now?
The next target is the 200 hour MA at 0.69586 and the 38.2% retracement of the move up from the June 18 low. Those targets come in at 0.6955-586. A move below that area will have shorts/traders looking toward the 100 and 200 bar MAs on the 5 hour chart, and the 50% retracement. That area comes in at 0.69317-388.
The range for the day is 70 pips (the 22 averages is only about 45 pips. So it is trend like. Trend can go farther than we expect and with RBA cut likely ahead, who knows what may happen.
Nevertheless, there may be some stall at 0.6955-58 area with close stops on a break. If the 50% and 4-hour MAs are tested then tested, I would expect more buyers/profit takers to step in (at 0.6932 area).
